What have we gotten right?

A growth agenda with roots in 2005 has blossomed into a productive entrepreneurial ecosystem

Unless you’ve been living under a rock for the last 18 months, you’re more than aware that Nashville has experienced a big bump in its national profile lately. Thanks to our continued exporting of various types of music, a TV show bearing our name and a veritable boom in our restaurant scene, we’re as in the mix as we’ve ever been culturally.

Oh, and our economy isn’t too shabby either, ringing up 2012 job growth of 3.9 percent — tops among the nation’s large cities — and following that up with 3.3 percent year-over-year growth through August. Early this year, the New York Times even dubbed our fair town the “it” city — a moniker some of our neighbors are honestly tiring of by now.

So it’s worth asking: What happened to get us here? How did we build the wings that helped us soar?

Headline-making economic development wins — thank you, UBS, Amazon and others — and the continued resurgence of the automotive sector are helping our growth numbers, but a lot of momentum also has come from young companies growing from five to 50 people in the blink of an eye. That we’re seeing more classic cases of entrepreneurs hitting their stride with promising ideas made good can be traced back to the middle of last decade and a sober assessment that stung a cadre of community leaders into action.

 
Setting the agenda

In 2005, ECD consulting firm Market Street Services published a report saying that Nashville needed to improve on its ability to launch, fund and build high-growth, innovative companies. That led to the creation in 2007 of a 75-member task force focused on aggregating and growing the region’s entrepreneurial resources. That group’s recommendations included drawing more capital to the region, creating the Nashville Entrepreneur Center — which opened its online doors in 2009 and its physical home a year later — as well as the pooling of experienced advisors and improving networking and educational opportunities.

Check all those boxes. The area’s entrepreneurial community has since been lifted by a surge in available capital — some of it backed by government initiatives — and a concerted effort to attract and grow a pool of technology talent. What was once a town known for music and — to the initiated — health care services, has now blossomed into a hotbed for a variety of tech-based ventures in a wide array of industries.

“Nashville is on an incredible trajectory right now as being one of the ‘it’ places to live and work,” says Charlie Brock, CEO of LaunchTN, the state body tasked with promoting entrepreneurship. “Even more, there is a strong support system helping move the needle for Nashville's entrepreneurs with their mentorship, investment and expertise."

Vital to our boom has been an increase in the number of experienced founders and executives willing to turn around and reinvest in the community that fostered their own development, with both capital and their expertise. The EC and various programs run out of its new Rolling Mill Hill facility benefit greatly from a strong and continually growing cast of mentors of all stripes.

That such a network now exists has helped in other ways outside the city. Thanks to work by executives such as Mark Montgomery of Flo{Thinkery}, EC CEO Michael Burcham and others, the likes of Google have begun to take an interest in Music City, hosting various events and building contacts. The search giant has even going so far as to declare the Nashville EC its “home in the South.”

“The number one thing we look for in a thriving startup ecosystem is a strong surrounding community,” says Mary Grove, director of Global Entrepreneur Outreach for Google, about why the technology behemoth chose Nashville to be part of its latest expansion. “We see that here in Nashville with your outstanding pay-it-forward attitude.”

Also on the theme of making our IT mark across the country, accelerator program Jumpstart Foundry inked a deal this year with West Coast accelerator nestGSV to begin an exchange program of sorts that lets start-ups from Tennessee go through a residency program in California, learning from the founders and investors in the tech start-up Mecca. That’s good for the local start-ups but it also serves as a means to grow the profile of Nashville outside of our own backyard.

 
Counting cash and talent

Yet, regardless of the good intentions of entrepreneurs and their mentors, the lifeblood of start-ups is in more cases than not access to capital.

In Nashville, there has always been a wealth of money available for the health care sector dating back to the 1960s. People often forget the fact that, once upon a time, HCA was a start-up, too.

It is only in recent years, though, that some of those capital sources have begun to look at earlier-stage ventures in the tech space. Funds such as Solidus (an investor in the Post’s parent company, SouthComm), The Nashville Capital Network and Clayton Associates have made a concerted effort to grow the availability of angel capital, investing smaller amounts to get founders past the proof-of-concept stage. Alongside their efforts, other angel groups also have coalesced to help build a broader base that can fund very young ventures.

The efforts by such firms were helped tremendously by the launch in 2009 of the TNInvestco program, which eventually chose 10 firms to manage investment pools created by the sale of tax credits. Combined, the chosen firms raised $140 million. By the end of 2012, the TNInvestco funds had put to work more than $91 million that amount. The companies in which they invested also had raised another $188 million and created almost 600 jobs after receiving their capital.

Lastly — and to many, most importantly — our entrepreneurial boom has been boosted by a big push to grow our pool of technology talent. One of the most ubiquitous stories of the last few years in the IT community has been a glut of unfilled technology jobs here in town, regularly numbering more than 1,000.

Various solutions have been tried but serious progress has been slow to come. But the national buzz we’ve gotten has combined with our relatively low cost of living and increase in start-up activity to attract more transplants to the city.

Not that local developers and other tech execs are waiting idly for them all to arrive. A number of them have banded together to grow our talent locally by training and re-training workers. Most notable among those efforts is the Nashville Software School. A darling amongst the tech community, the intensive program has turned out a couple of classes thus far and many are hoping to expand the effort soon.

Newly tapped Nashville Technology Council chief Bryan Huddleston says the combination of active users groups led by people including Eliza Brock, Cal Evans, Bryan Hunter and Brian Daily has combined very well with “forward-thinking, risk-taking founders” such as John Wark, Nicholas Holland, Marcus Whitney and Kate O’Neill who are trying out new ideas. Throw in more (and smarter) sources of early-stage funding and some attention from organizations such as Google and, Huddleston says, you have the making of an entrepreneurial boomtown.

Even better: We haven’t tinkered with the DNA of our city.

“The first big plus is a unique sense of culture and community,” says Huddleston in describing Nashville’s rise. “Our culture is to embrace and support others. In any organization or community, it is the individuals who make the difference.”

If Nashville has gotten one thing very much right during our recent surge, it’s that our efforts have helped us remain quintessentially who we are.

— Geert De Lombaerde contributed to this story